Finance
A Kentucky investment property has a NOI of $36,000 and an annual mortgage payment of $30,000. What is the debt coverage ratio?
A0.83
B1.0
C1.2✓ Correct
D1.5
Explanation
DCR = NOI ÷ Annual Debt Service = $36,000 ÷ $30,000 = 1.2. Using the values given ($36,000, $30,000), apply the appropriate formula.. The correct answer is 1.2.. This is a common calculation on the Kentucky real estate exam.
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